DENVER—People and businesses behind on their taxes could get a chance this fall to make things right without penalty—and in the process add a projected $10 million to Colorado’s education budget.

A bill awaiting likely approval by Gov. John Hickenlooper would create a tax amnesty from Oct. 1 to Nov. 15, letting taxpayers settle amounts they owe without fines. Those who pay in full without entering payment plans would avoid interest due.

The idea is a popular one around the country—and one that states like to tap into during tough budget years. Colorado last had a tax amnesty in 2003, and lawmakers say enough time has gone by to have another one. One worry about offering too many tax amnesties is that people can wait until the next round to pay what they owe.

The state’s schools could use the money. Democratic Rep. Mark Ferrandino, who sponsored the bill, said an amnesty will ease the pain of persistent cuts to K-12 education. Next fiscal year, education funding faces a cut of about $227 million.

Legislative fiscal analysts estimate the amnesty could bring in about $12.6 million. Some of that would be used by the Department of Revenue to cover the cost of implementing the program. Another portion would go to the state general fund, and about $9.7 million would be put in the state’s education fund next fiscal year.

While that may not seem like a lot, given the massive cut to education funding, Ferrandino said the money goes a long way.

“I think that helps our kids, it helps keep teachers employed and keeps class sizes that much smaller,” he said. “While it doesn’t solve the full budget problem, it takes a step in the right direction.”

The amount the state would collect could end up being much different than what analysts predict since there’s no way of knowing how many people would come forward. During the 2003 amnesty, lawmakers expected between $5 million to $10 million. What they got was $22 million.

Ferrandino’s proposal received bipartisan support, but some lawmakers said they were conflicted because it appears to reward people who skimp on taxes while most follow the rules.

“This is a real mixed-bag bill for me, and one of the things I struggle with is that equity aspect,” Republican Rep. Don Beezley said during a committee hearing on the bill last week. “On the other side I like it because I think government tends to be a little too hard on people that are struggling to pay those taxes.”

Only people with an existing tax liability before Dec. 31, 2010, would qualify—precluding individuals who may have learned of the bill earlier this year and purposely didn’t pay taxes due in April.

Ferrandino said businesses benefit most because they often fall behind on tax payments or make mistakes because their taxes tend to be more complicated.

“That burden gets lifted from them and they do what they’re legally obligated to do and want to do, I think,” he said. “Businesses want to be responsible citizens—at the same time helping to put money to K-12.”

The owners of Boulder’s Sterling University Peaks apartments, who this summer were cited for illegally subdividing 92 bedrooms in the complex, have reached an agreement to settle the case for $410,000, the city announced Thursday.